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Best practices...by definition. (Special Section: Overview).

best(best)adv. prac.tices(prak' tis z)noun; documented strategies, activities and approaches shown through research and evaluation to be effective at driving the highest levels of excellence in productivity, profitability and competitivenes.

Logging on to www.google.com keying in "best practices" resulted -- in less than 1 second -- in 3,210,000 entries. Not exactly an easy subject to wrap one's arms around. Which, ironically, relates to the concept of best practices itself.

Browsing the first 30 pages clearly proved that best practices data permeates a variety of industries, services, processes and disciplines --ranging from manufacturing, human resources, communications, consulting, education, health care, supply chains, information technology. government and customer service, to psychiatry and programs for substance abuse, to name a few.

Sites like www.hackettbenchmarking.com describe best practice areas and suggest interested parties benchmark, or compare, their performance to the leaders and use the proven methods as guides for setting improved performance goals and targets instead of "devoting scarce resources to inventing new techniques."

At www.bestpractices.com, the Web site for Best Practices, LLC (BP), a Chapel Hill, N.C.-based consulting firm, best practices are defined as "documented strategies and tactics employed by highly admired companies. These companies are not best-in-class in every area -- such a company does not exist. But due to the nature of competition and their drive for excellence, the profiled practices have been implemented and honed to help place their practitioners as the most admired, the most profitable and the keenest competitors in the business."

Looked at in yet another way, Stanford faculty member turned researcher-consultant-author Jim Collins applies an analogy of science to best practices by making a clean distinction between the realm of physics and engineering. He defines best practices as "discovering timeless laws of physics and then, over time, creating practices that match with those to bring them [the laws] to life."

When it comes to engineering, Collins argues, "Be it mechanical, electrical, biological, the practices constantly evolve and change. Contrast that with the laws of physics, which remain relatively fixed and intact." Indeed, engineering best practices in the 1950s differ vastly from those of 2002, while the laws of physics remain the same, he says.

Co-author of the landmark bestseller, Built to Last, and author of the current Good to Great, Collins applies the laws of physics to building great organizations. "A thousand years ago and a thousand years from now, these timeless universal principles and laws of physics would be true, while the practices attached to the principles change, year to year and decade to decade."

Becoming Great

These scientific principles Collins describes form the core of companies he's dubbed "great companies," those that have, over time, grown from good to great, according to a stringent formula he and his research team have developed. A fundamental difference between a practice and a law of physics, he says, as gleaned from his decade-long studies of such companies, is putting "who" questions ahead of "what" questions. "That's a law of physics that we discovered in our research: who proceeds what."

If you think of organizational strategy in the context of a bus -- where it's going, who gets on and off, and so on -- Collins says the leaders think first in terms of who: who should be on the bus, who should be off the bus and who should be in what seats -- rather than about where they're going to drive the bus: a what are we going to do-type question.

Over time, he continues, practices of how we get people on the bus -- or in our organizations -- changes. We've evolved from indentured servants to the next stage, jobs, and we're now moving to a stage where people increasingly contract with organizations in a variety of different ways. Although in the future, full-time jobs may disappear as the traditional practice, we'll still have to think about getting the right people in our organizations. So, while the practices for getting people in organizations will change, the principle -- that law of physics that it's always "who" first and then "what" -- won't change.

Sustaining the Best

Much of the published works concentrate narrowly on specific best practice areas, yet how can -- and should -- companies aspire to attain "best-in-class" overall? Collins says you should start by focusing on the results you want, specifically, "what produces the most sustained results, and the ultimate changes in those results." You then back in from that to discover the principles associated with those results; then seek out what practices are being used to achieve those principles.

Picture it as a cascading chain, he says. At the top of the chain is the actual delivery of sustained results -- superb performance over time. The next level down is the principles that drive that. And the level down from that is the practices currently used to bring those principles to life.

Caution is advised when relying on best practices, as some dangers lurk. Collins points Out two of them. The first applies to your approach. He says that by not starting backwards -- results, back to principles, back to practices -- but rather going from practices outwards, you run the risk that there may be no relationship between practices and results.

Second, what works really well in practice in one company simply doesn't transfer very well to another company. As CEO of Motorola, Inc., George Fisher had a series of very successful practices driving the company. When he became the chief executive of Kodak, his performance wasn't as great. He was unable to turn Kodak into Motorola, even though he did, arguably, a pretty sound job, says Collins.

That you have to exercise caution doesn't mean you shouldn't do it, he argues. "You can get great ideas by learning what others are doing. The question is whether they are the right ideas."

While many believe that researching, benchmarking and applying best practices in organizations is a good practice, Collins advises start with the eight principles, or organizational laws of physics, that he says correlate with producing the best results. "Those eight are the principles we now understand are essential for building the greatest companies." (See chart at left.)

Instead of only asking, "What are best practices?" Collins says, the question really is: "Best practices in what context?" His answer: "Best practices that help bring to life any and all of those principles."

Editor's note: Read the entire Q&A interview with Jim Collins at www. fei.org/magazine/Exclusives/Collins03_02.cfm.

RELATED ARTICLE: 8 PRINCIPLES FOR THE BEST RESULTS

1. Level 5 Leadership. Leaders who are ambitious for the company not themselves and tend to have more humility than ego. They are not charismatie and usually not big delebrities

2. First "who" ... Then "What." Right people on the bus wrong people off right people in the right seats

3. Confront the Brutal Facts. Do so before outlining the grand vision.

4. Get the Three Circles Right. Build strategy on three cornerstones doing something you're passionate about in which you can be the absolute best in the world and that fundamentally drives your economic engine

5. Have culture of discipline. Not just at culture

6. Harness Technology. Accelerate momentum once you've hit great results

7. Flywheel, Not Doom Loop. Push in a consistent direction rather than constantly changing direction

8. Build on an Enduring Core Theology and a purpose beyond making money that do not change over time ever under any circumstances

Source: Jim Collins author Good to Great
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Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:management strategies
Author:Heffes, Ellen M.
Publication:Financial Executive
Geographic Code:1USA
Date:Mar 1, 2002
Words:1248
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